Here is my take on it:
Consider this, you buy the song when you hit play for $1.05. When the song stops, the company buys back the song for $1. Company just made $0.05. You just got billed for $0.05. You no longer own the songs, company can sell it to the next member.
Let's assume some numbers:
- 100K members.
- 2M songs.
- Max songs played at the same time: ~100K (high usage).
- Avg songs played at the same time: ~10K (daily avg).
- Favorite song copies needed to be owned: ~1K
- Avg. number of copies per song needed to be owned: 5 (maybe lower).
- 2M * 5 songs = 10M ~ 1M CDs ~ $20M inital layout.
- 10K songs played constaly for $0.05 per song. A song is 5 min long. That is 10K * $0.05 = $500 every 5 mins = $6K per hour = $144K per day.
Ergo profitable in 139 days.
- You do not own any songs, but you can play any at any time for 5c per song.
- If you play music 15 hours a day 30 days a month, then with 5c per 5min song you would end up paying $100/mo. This however means CONSTANT MUSIC TO YOUR EARS FOR ALL YOUR WAKING HOURS!
If lowering sale price to $1.01 per song:
- Comany makes to 1c per song, and still it is profitable in a year and a half!
- UNLIMITED music cost you $20(!!) per month.
- As per Mr.Sharpy (472377) suggestion 20% of income can be returned to artists. My idea would be 10% to the song's artist (to reward popular artist for their hard work) and 10% toward a music artis fund (to support innovation and up-coming artists)
- If you burn it to cd, you brake the law.
- Streaming is the only way you can access
- Only works with instant online connection.
- Fad songs lose money, as you need to own more copies for inital interest, after which there will be no more interest.